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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (21426)	6/7/2005 11:46:05 AM
From: Paul Senior	Read Replies (1) of 78748

I'll take a few shares of PDII from the new lows list. Stock at stated book value withe 0 d/e. Per Yahoo, about $6.4/sh in cash (which might include s/t investments); stock's at about $11.24/sh. Company's been profitable 6 of past 7 years. Average roe over that timespan seems reasonable to me given its book value and the price you pay for that now. The company provides sales/marketing services to "biopharmaceutical, medical device and diagnostics industries." It's possible that there are still unresolved and undetermined problems with the business model of PDII. There's on-going consolidation in the bio and pharma industries,and that has (imo) reduced the number of contracts that PDII will get in future. There are consumer grumblings that pharma companies spend too much on sales and marketing. That could hurt PDII if PDII customers reduce such spending. (Or it could help if the companies say they'll cut back on their marketing/sales staff, but yet quietly shift some of that work to outsourcers like PDII.) PDII is a stock that in its history has been both strongly liked and strongly detested, as the chart shows: finance.yahoo.com Perhaps PDII might again come back in favor. Seems to me that the strong balance sheet gives the company some room to maneuver. I'm hoping that within 18 months or so, there'll be an up cycle to the stock, and that the down cycle now, is abating. But who knows?

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